If you are considering getting married or entering into a civil partnership, you may want to consider getting a pre-nuptial agreement (‘pre-nup’) drawn up. Pre-nups are becoming increasingly popular. They are for anyone, not only for the rich and famous.
Pre-nups can provide greater certainty by agreeing at the outset how your finances will be divided if you were to later separate or divorce.
A pre-nup is an agreement which is entered into by the parties to an upcoming marriage or civil partnership, which sets out what will happen to their assets should the marriage breakdown.
Everyone has their own reasons for entering into a pre-nup. It may be that you and your partner simply like to be as organised as possible with your finances. Entering into a pre-nup does not mean you are more likely to get divorced. A pre-nup may be beneficial, for example, for couples who have children from a previous marriage or relationship and who may wish to protect assets for the purposes of inheritance planning. Alternatively, one of you may want to protect assets by ring-fencing them from the other, such as property acquired prior to the marriage or family trusts.
It is important to note that pre-nuptial agreements are not strictly binding in England and Wales. However, the Courts will take the terms of a pre-nup into account when deciding how to split the assets following a divorce or dissolution of a civil partnership. The terms of a pre-nuptial agreement could well be in the event of a dispute that is dealt with by the Court unless the effect of the agreement would be manifestly unfair.
To improve the prospect of the pre-nup being upheld, the following factors should be considered:
• Both parties must receive independent legal advice before entering into it.
• The pre-nup must be entered into freely by both parties.
• At the time of the agreement, both parties must have made full financial disclosure. This means that all assets and income should be shared openly.
• The agreement should be recorded in a formal document, known as a ‘Deed’ which contains a statement signed by both parties which confirms their intentions to be bound by the terms of the agreement.
• The pre-nup should not be drawn up immediately before the marriage
You should not enter into a pre-nuptial agreement unless you intend to be bound by the terms of that agreement.
In the event of a dispute, the Court will look at your circumstances as they are at the time the agreement is being considered. Importantly, what may have been fair at the time the agreement was made, may not be considered fair if you or your spouse’s circumstances have changed significantly, for example you have had children and one of you has a reduced earning capacity or one of you has suffered ill health, and the agreement hasn’t provided for those changes.
Planning in advance is key. If you are looking for a pre-nuptial agreement, it is beneficial to seek legal advice early on, to allow time for financial disclosure and negotiations to take place. To increase the chances of the pre-nup being upheld, it should be signed at least 28 days before the wedding date. This helps to ensure that neither party feels undue pressure to sign the agreement at the last minute. We would recommend seeking advice at least 2 to 3 months before the wedding.
It is very important to obtain professional legal advice from a family law solicitor to ensure that the pre-nuptial agreement is properly drafted. This will increase the chances of the agreement being upheld by the Court when determining the financial matters on divorce.
Our friendly family team are here to explain and guide you through legal matters relating to divorce and finances. Please get in touch on 01892 526344 or email email@example.com. For further information on all our family law services, please click here.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.